It’s time to look back on the financial predictions made at the start of 2014 and see who knew what they were talking about.
Each year, Money Talks News finance expert Stacy Johnson puts Wall Street and Main Street head-to-head in predicting what the new year will bring for stocks, oil and the housing market.
Now, it’s time to see how well last year’s predictions held up to reality. Watch the video below to see what the experts and the man on the street did (or didn’t) know about 2014. Then keep scrolling for the details.
Wall Street was closest when it comes to the stock market
In 2013, the stock market saw explosive growth, with the Dow Jones ending the year up 26.5 percent. Would that continue in 2014?
According to predictions from Wall Street analysts, published by Business Insider, pros thought the stock market would continue growing but at a slower pace. Their average prediction was 5.6 percent growth for the S&P 500 in 2014.
Meanwhile, Main Street was feeling decidedly more pessimistic about the state of the stock market. Our man on the street predicted a 10 percent drop in stock prices by the end of the year.
We’ll give Wall Street this round because they at least knew the market would be on the upswing. That said, their predictions weren’t exactly spot on. The Dow Jones hit some all-time highs in December and closed out 2014 with 7.52 percent growth for the year. Meanwhile, the S&P 500 ended the year with an 11.4 percent gain, more than double what the experts quoted by BI predicted.
No one saw what was coming with oil prices
The shocker of the year may be oil prices. Have you been to your local gas station lately? Mine is selling regular unleaded for $1.77 a gallon. Who saw that coming?
Apparently neither Wall Street nor Main Street.
The Energy Information Administration told us oil prices would remain steady from 2013 and run at about $95 a barrel. Main Street thought the price might go up a little, with the price climbing past $100 a barrel.
Certainly, both predictions looked to be spot on during most of the year. The price of oil hovered around $95 a barrel in the spring before peaking just above $100 a barrel in midsummer. But then the price started to free-fall in September and has never recovered. At the end of 2014, oil was selling for $53.27 a barrel.
The reasons for the drop in oil prices are varied. USA Today points to slowing global demand, increased U.S. production and a reluctance by OPEC to reduce output. Meanwhile, Russian President Vladmir Putin appears to be among those who think reduced oil prices are being orchestrated by the U.S. to punish his country.
Whatever the reason, enjoy the cheap gas while it lasts.